November 13, 2019 / 3:06 PM / 3 months ago

UPDATE 2-FranceAgriMer increases wheat export forecast again

* Farm office sees non-EU soft wheat exports at 12 mln T

* Says some traders see scope for 13 mln T exports in 2019/20

* Egypt, China sales boost sentiment, Russia trend a question mark (Adds comments from news conference)

By Gus Trompiz

PARIS, Nov 13 (Reuters) - Farm office FranceAgriMer on Wednesday increased its forecast of French soft wheat exports for a second month in a row, adding to expectations that France is benefitting from a big harvest and reduced Russian competition to gain market share overseas.

In monthly supply and demand estimates for major cereals, FranceAgriMer pegged French soft wheat shipments outside the European Union this season at 12.0 million tonnes, up from 11.7 million projected last month and a new four-year high.

The revised 2019/20 wheat export forecast was up 24% compared with last season’s level. FranceAgriMer had already increased its estimate last month from an initial outlook of 11 million tonnes in September.

FranceAgriMer’s export outlook remained conservative compared with some market participants who expect up to 13 million tonnes of French soft wheat shipments outside the EU, Marc Zribi, head of the office’s grain unit, told reporters.

Competitive French prices, coupled with unusually high prices in top wheat exporter Russia, have boosted export sentiment and led to several sales of French wheat to Egypt.

A run of French wheat exports to China has fuelled optimism about this season, Marion Duval, deputy head of FranceAgriMer’s grain unit, said, adding traders remained confident that demand from top French wheat buyer Algeria would recover after the North African country skipped purchases for October.

The export pace in Russia, which has been dented by high domestic prices, slow farmer selling and a firm rouble, remained a question mark for the rest of the season, FranceAgriMer said.

Some traders have cautioned that France could face headwinds if Russian exports gather pace and Argentina’s upcoming crop is competitive.

The raised export forecast contributed to a decrease in FranceAgriMer’s outlook for soft wheat stocks at the end of the season, now seen at 2.54 million tonnes compared with 2.9 million expected previously.

The reduced stocks outlook also reflected a downward supply revision as FranceAgriMer incorporated a slight reduction to the farm ministry’s estimate of this year’s crop.

The 2019 harvest would nonetheless be the second largest on record at 39.5 million tonnes.

In other cereals, FranceAgriMer slightly increased its projection of 2019/20 maize (corn) ending stocks, to 2.2 million tonnes from 2.1 million, as it trimmed expected exports within the EU.

Forecast barley stocks were kept at 2.1 million tonnes.

Durum wheat stocks were revised down to their lowest in at least five years at 86,000 tonnes, as expected exports within the EU were revised upwards despite a much smaller crop this year. (Reporting by Gus Trompiz, additional reporting by Forrest Crellin, editing by Louise Heavens, David Evans and Dale Hudson)

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